Although not perfect, the program set up by the government to penalize hospitals with high readmission rates has potential, two Harvard researchers said.

Although not perfect, the program set up by the government to penalize hospitals with high readmission rates has potential, two Harvard researchers said.

Through the Hospital Readmissions Reduction Program (HRRP), about two-thirds of U.S. hospitals will pay a price for high readmission rates, according to Karen E. Joynt, MD, MPH, and Ashish K. Jha, MD, MPH, from Harvard School of Public Health and Brigham and Women's Hospital, both in Boston.

Under the program, CMS calculates the expected readmission rates for certain conditions and compares them with the actual readmission rates, fining hospitals at which the observed readmission rate exceeded the expected rate. The current penalty for missing the mark set by the Centers for Medicare and Medicaid Services (CMS) is up to 1% of the hospital's Medicare reimbursement, a percentage that will increase to up to 3% by 2017.

Overall, CMS expects a windfall of $280 million from the 2,217 hospitals fined in 2013, wrote the researchers in a Perspective article published online in the New England Journal of Medicine.

The high number of hospitals with readmission rates in the red zone was quite unexpected because CMS' own research estimated the percentage of hospitals exceeding expected readmission rates to be less than 5%, the authors noted.

The readmissions reduction program began on Oct. 1, 2012, and is focused on three conditions: acute myocardial infarction, congestive heart failure, and pneumonia.

Opponents of the penalty program say hospitals should be exempt because the circumstances "that predict readmissions largely take place outside the hospital's walls." Another point of contention is that some hospitals will receive more cuts than others because of their patient mix.

In a previous study, Joynt and Jha relayed data that showed large hospitals, teaching hospitals, and safety-net hospitals will take the brunt of CMS' cuts in 2013 (JAMA 2013; 309: 342-343).

Of the 3,282 hospitals in their analysis, 66% will be penalized. "Highly penalized" large hospitals outnumbered their smaller counterparts by 40% to 28%. Conversely, of hospitals not penalized, the small ones outnumbered the larger ones: 47% versus 24%.

The pattern was similar between major teaching hospitals and nonteaching hospitals. There were more teaching hospitals that were highly penalized and fewer that were not fined at all. In the multivariate analysis, safety-net hospitals had the greatest odds of being penalized (OR 2.38, 95% CI 1.91 to 2.96, P<0.001).

Evidence presented in the current paper showed that the hospitals receiving no cuts in Medicare payment had a smaller proportion of patients who were receiving Supplemental Security Income. The median amount of patients on Supplemental Security Income was between 7% and 9%, and they were penalized a median of nearly 0.15% of Medicare payments.

But the authors point to a silver lining: a small but significant drop in readmission rates for all causes across the U.S., going from 15.6% in 2009 to 15.3% in 2011.

Joynt and Jha credit the readmissions reduction program, or more accurately the anticipation of the program, for motivating hospitals to enact measures to blunt the readmission rate. They noted the possibility that hospitals could be "gaming" the system by doing things such as holding more patients in the emergency department, but are hopeful the decrease in readmissions is real.

Now that the evidence clearly shows an inherent bias in the program, steps can be taken to balance the scales of justice, the authors said.

There can be adjustments to the fines based on patients' Supplemental Security Income. Safety-net hospitals would then be on equal footing with other hospitals.

Another step could be "weighting the HRRP's penalties according to the timing of readmissions." Readmissions 3 days post discharge could be weighted more heavily than readmissions after 30 days, Joynt and Jha said. They assumed that a shorter time period before readmission reflected "poor care coordination or inadequate recognition of post-discharge needs," and that a longer time before readmission reflected illness severity.

A final suggestion from the authors is to give hospitals credit for low mortality rates, which would "acknowledge the competing risks at play in the readmissions metric."

They noted that no "policy is ever perfectly designed at inception," but the readmissions reduction program -- with adjustments -- can help hospitals become "increasingly accountable for what happens to their patients beyond their walls."

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